FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels - March 14, 2011

The GBP/JPY is developing wave C of medium term downtrend - colored royal blue in the chart. On smaller scale this wave consists of A-B-C subwaves (colored magenta in the chart) with subwave C still developing. The targets of the downmove are Fibonacci expansions off 135.56-131.14-135.19, and 135.19-132.97-134.40.

Supports:

- 128.59 = super expanded objective point (SXOP)
- 128.04 = expanded objective point (XOP)

If the price keeps moving up the immediate resistances will be Fibonacci retracements of 135.19-129.75, 134.40-129.75.

Resistances:

- 132.47 = .50 retracement
- 132.62 = .618 ret
- 133.11 = .618 ret

Overbought/Oversold

Assuming that the medium term trend is down it's preferable to look for shorts when the Detrended Oscillator gets above the zero level (current prices), or into the overbought area, which is 30-40 pips above the current price level, and that roughly corresponds to 132.47 Fib resistance.

Read more on how to apply Fibonacci studies to calculate price targets.